What is the definition of CEO? The Chief Executive Officer, CEO, is the most important person in any company. Often, although not always, the founder of the company the CEO sets the direction, culture and goals of the organisation.
They are the true leader who is ultimately responsible for everything that takes place within the organisation. Depending on the size of the organisation the day to day tasks of the CEO may differ however the fundamental principles of how the company grows and evolves all remain their responsibility.
What Type of person is the CEO?
The CEO does not necessarily conform to a certain type of personality. Different CEOs are renowned globally for a range of approaches. Some are known for being outgoing and confident in the public eye and comfortable at speaking in front of large audiences. Others are more introverted in their approach, more focussed perhaps on leading through their technical capability and knowledge.
What is important is that the CEO can set the direction and culture of the company, is capable of hiring the right people to support the organisation’s growth and is able to make strategic decisions regarding the company finances. These principles are equally important in a start-up as they are in multinational corporations.
What Qualifications do you need to be a CEO?
There are no standard qualifications required to be a CEO that said there are leadership qualifications that can help develop the skills to be successful in the role.
Many CEOs assume the position by virtue of the fact they start a company. As the founder it is they who set the direction of the company of the start. Many company founders become CEOs and lead the company until retirement, for example Richard Branson, Bill Gates or Mark Zuckerberg.
For others they become a CEO having worked in industry for a number of years and a vacancy arises. Typically these people are often qualified to degree level. They will often have a strong track record of performance in industry with an outstanding CV. To support their application they will often have completed an MBA with a reputable university or similar leadership qualification.
CEO Salary - What type of Salary can a CEO expect?
According to figures at Payscale.com the average CEO salary is £98,672 per annum. On a person by person basis these figures can range dramatically. In a large corporation a CEO can expect a salary in excess of £1m plus per annum with various bonuses, share allowances and performance related pay schemes written into the contract. In a start-up environment the CEO may have a limited salary as he or she attempts to get the business up and running.
What are the CEO’s main responsibilities?
The CEO is responsible for setting the direction of the company, ensuring that the staff team assembled has bought in to this direction and is willing to follow. The CEO will need the ability to plan in advance, taking into consideration all the different things that may impact the journey of the company including the market place, economic factors and consumer behaviours. This key trait is often described as having vision.
There is a saying in industry that ‘Culture eats strategy for breakfast.’ If the culture of the company is not driven towards success through its values then the company is highly unlikely to achieve its goals. The CEO is ultimately responsible for setting the culture of the company through their vision and more importantly their actions. If the CEO is late then staff will view lateness as being ok. If the CEO rules with an authoritarian approach then it is likely that the company will grow a reputation for being regimented.
Managing the Board
The Board of Directors is convened to support the CEO on the strategic decision making of the company and usually individuals oversee one specific department such as finance, marketing or operations. The CEO however has a responsibility toward the board itself. In the first instance he or she is responsible for ensuring that recruitment to the board is thorough and that the right people are picked to join. The CEO is responsible for motivating board members and setting realistic performance challenges, alongside providing responsibilities for professional development. In a small business or start-up the board may more likely be senior departmental managers and trusted staff.
In any business environment investment is key to growth. It is critical that when investments are authorised they provide a return. Should spending be approved that doesn’t provide sufficient return the impacts of the long term sustainability of the organisation can be significant. The CEO will authorise any large capital spend projects to ensure they fit with the strategic direction of the company. In a small business environment the CEO may also authorise any smaller spending allocations when budgets are tight.
What job sectors do CEOs belong to?
The CEO role is not particular to any specific sector. CEO’s can work in a number of job sectors.
What skills are needed to become a successful CEO?
The CEO requires a rounded and diverse skill set to be successful in the role. The different types of skill required include:
Leadership – the ability to set the direction for a staff body to follow.
Motivational – ensuring staff are ready to support the CEO on the challenges ahead.
Planning – identifying a vision and planning how to negotiate the challenges ahead.
Recruitment – in order to find the right people to support the CEO on the board.
Financial Management – making sure that investment deliver returns.
CEO Challenges - Pitfalls and Solutions for the CEO
It can be tough at the top and for a CEO it can also be very lonely. With no one to answer to the job can present numerous pitfalls. If the CEO isn’t careful they can all too easily become overconfident in their own ability, take their foot off the pedal if things are going well or slow down on their own personal development because they think they’ve made it.
In order to avoid these trappings it’s a good idea for the CEO to surround themselves with trusted colleagues who will give honest feedback on performance and hold them to account. Furthermore a successful CEO will set time aside still for personal development, spending time reflecting on performance and seeking ways to do better.